What regulatory checks should I do before using an advisor?

One rookie mistake taught me to slow down. A couple of years back I almost signed with an advisor who looked polished online, but I hadn’t checked regulatory marks closely. Since then I use a simple, practical checklist that keeps me grounded.
- Confirm registration: RIAs with the SEC or state regulators; or FINRA for brokers. Check IAPD and BrokerCheck.
- Read Form ADV to see services, conflicts, and whether they tolerate independent custodians.
- Verify credentials (CFP, CFA) and any required disclosures.
- Understand fees: fee-only, hourly, or commissions; know how compensation might influence recommendations.
- Custody and protection: ensure assets are held by a reputable custodian; confirm E&O and fidelity bond.
- Documentation: engagement letter, disclosures, privacy policy, and clear termination terms.
- References: talk to a few current clients about communication and trust. Doing this saved me from dodgy pitches and helped me choose with confidence.

Before hiring any advisor, I start with regulatory basics to separate trustworthy pros from red flags. In the U.S., confirm whether they’re a Registered Investment Adviser (RIA) with the SEC or state regulator, or a FINRA-registered broker-dealer. Use the SEC’s IAPD and FINRA’s BrokerCheck to review disclosures and any past disciplinary actions. Read Form ADV Part 1 and Part 2A/2B to understand services, fees, and conflicts of interest. Check credentials like CFP or CFA. Ask for a clear engagement letter and a transparent fee structure (fee-only vs. commission-based). Confirm assets will be held by a reputable custodian and verify appropriate insurance (E&O, fidelity bond). Request client references and a sample advisory agreement, and clarify termination terms and data privacy.